First Solar shares plunge after project delay

@CNNMoneyInvest February 10, 2012: 12:35 PM ET

NEW YORK (CNNMoney) -- Shares in First Solar fell nearly 9% Friday after the solar panel maker and project developer reported a delay in funding for a massive solar farm the company is building near Los Angeles.

In an SEC filing, First Solar said the first round of financing the company was expecting under a $646-million loan guarantee backed by the Department of Energy hasn't materialized because of a hold up with a construction permit.

If the construction permit and subsequent funding don't come through by Feb. 24, the company may be forced to cancel a deal it has struck with the utility Exelon to buy the solar farm, known as Antelope Valley Solar Ranch.

Exelon (EXC, Fortune 500) has already paid $75 million for the solar farm and has an agreement with California utility PG&E (PCG, Fortune 500) to purchase the power from it. First Solar is slated to produce the panels, build and operate the facility.

If the deal falls through, First Solar said it is confident it can find another buyer for the project.

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"First Solar expects its current cash and other capital resources would be sufficient to enable First Solar to repurchase [the project], if necessary, while meeting First Solar's working capital and capital expenditure needs," the company said in its filing.

Investors weren't so reassured -- the news made First Solar the biggest loser among S&P 500 stocks midday Friday.

Still, volatility is nothing new for First Solar (FSLR) shares, and the firm's stock remains up over 30% so far this year.

The DOE loan program itself is slated to make news later Friday when the Obama administration is expected to release an independent report on the workings of the program.

The loan program has come under intense political scrutiny after funding the now-bankrupt solar panel maker Solyndra.  To top of page

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